rec

2
reccomendations The IMF needs to adapt its approach in low-income countries to its expected role and be crystal clear about what that role is. The Working Group's recommendations assume that the IMF will remain an important macroeconomic policy and risk adisor in these countries. !ut i" this is to be the case# some signi"icant changes in the $IMF way o" doing business$ are needed. The Group identi"ied six speci"ic recommendations that will re%uire action by the IMF !oard and Management. &. The IMF should help countries explore a broader range o" "easible options "or the "iscal de"icit and public spending. This re%uires less emphasis on negotiating short-term macroeconomic conditions in its programs and a greater "ocus on helping countries strengthen their understanding o" the conse%uences o" di""erent options. . The IMF !oard and Management should adopt and make public clearer guidelines on what is expected o" IMF sta"" in analy(ing the conse%uences o" alternatie leels o" aid and on what should drie IMF signals about aid leels ). While it is not the IMF *ob to decide what aid leels should be# it should more to promote "uller and more timely in"ormation about expectations "or aid in its programs +. Wage bill ceilings should be dropped "rom IMF programs except in cases where a loss o" budgetary control oer payrolls threatens macroeconomic stability. ,. IMF programs should gie greater emphasis to smoothing expenditures in the short term e.g. when there are unexpected shocks to aid especially when macroeconomic instability is no longer a signi"icant threat. /. The IMF should be more transparent and pro-actie in discussing the rationale "or its policy adice and the assumptions underlying its programs.

Upload: arpan-mahajan

Post on 05-Oct-2015

217 views

Category:

Documents


0 download

DESCRIPTION

hi

TRANSCRIPT

reccomendationsThe IMF needs to adapt its approach in low-income countries to its expected role and be crystal clear about what that role is. The Working Group's recommendations assume that the IMF will remain an important macroeconomic policy and risk advisor in these countries. But if this is to be the case, some significant changes in the "IMF way of doing business" are needed. The Group identified six specific recommendations that will require action by the IMF Board and Management.1. The IMF should help countries explore a broader range of feasible options for the fiscal deficit and public spending. This requires less emphasis on negotiating short-term macroeconomic conditions in its programs and a greater focus on helping countries strengthen their understanding of the consequences of different options.2. The IMF Board and Management should adopt and make public clearer guidelines on what is expected of IMF staff in analyzing the consequences of alternative levels of aid and on what should drive IMF signals about aid levels3. While it is not the IMF job to decide what aid levels should be, it should do more to promote fuller and more timely information about expectations for aid in its programs4. Wage bill ceilings should be dropped from IMF programs except in cases where a loss of budgetary control over payrolls threatens macroeconomic stability.5. IMF programs should give greater emphasis to smoothing expenditures in the short term (e.g. when there are unexpected shocks to aid) especially when macroeconomic instability is no longer a significant threat.6. The IMF should be more transparent and pro-active in discussing the rationale for its policy advice and the assumptions underlying its programs.